In October 2012, the weighted average inflation rate in the six-nation Gulf Cooperation Council (GCC) stood at as low as 2.6 per cent year-on-year mainly because of ongoing housing market correction in some members and large base-effects in others, the Riyadh-based Jadwa Investments said in its monthly inflation report.
“Inflation in Saudi Arabia remains the highest in the GCC…according to the Central Department for Statistics and Information, Saudi Arabia’s inflation rate for November slightly increased to 3.9 percent year-on-year from 3.8 percent in the previous month.”
While food prices rose slight to 4.8 percent year-on-year, rent and housing-related services maintained their gradual downward trend to reach 6.5 percent, compared with 6.7 percent in the previous month.
“Our measure of core inflation trended up to 2.2 percent in November compared with 1.8 percent in October.”
The report showed rent and housing-related services inflation fell to its lowest level in five years, though it remains the main source of inflation, adding 1.5 percentage point (ppt) to the overall inflation.
The main source of price increase in this group is the rental inflation which registered 7.2 percent year-on-year in November, it said.
“While we maintain our view that rental inflation is likely to remain one of the main sources of inflation in the Kingdom, we expect that the growing activity in the local construction sector and introduction of new rental regulations would maintain the gradual downward path for such prices.”
